North-South Expressway: Vietnam lowers criteria for local investors

A local investor should have participated in a project whose value is at least 20 percent of a subproject of the North-South Expressway, said Nguyen Viet Huy, deputy head of the ministry’s Public-Private Partnership (PPP) Department. 

For a consortium of investors, the ministry has scrapped a regulation that each investor should contribute at least 15 percent of the consortium’s capital.

However, the main investor of each consortium would still have to account for at least 30 percent of the consortium’s capital. A consortium must have five investors at the most.

A local investor with foreign ownership of less than 51 percent can invest in the project. This regulation seeks to attract more investors.

In case there is no suitable investor, the ministry will make a proposal to the government to switch to public investment, Huy said.

In September, the ministry had decided not to invite foreign bids for the eight subprojects of the expressway to be built under the PPP model, saying only a few qualified and this could lead to a low level of competition.

The switch to local investors could prolong the tendering process by three months to November 2020 as the ministry has to carry out new preliminary evaluations of investors before they can bid, it said in a recent report to the National Assembly.

The evaluations are expected to be completed by next February, the contractor identified by August, and the tendering process completed by November, the report said.

Eleven subprojects of the transnational expressway, prioritized for this year, cost a total of VND118.72 trillion ($5.12 billion), of which VND55 trillion ($2.37 billion) will come from the government, and the rest from commercial loans, mainly from domestic banks.

Three sections will be publicly funded and eight are to be built under the PPP model. Work on the first of the state-funded sections began earlier this month, while work on the eight PPP sections could begin next April, the ministry has said.

The 11 sections will run 654 kilometers between northern Nam Dinh Province near Hanoi and Vinh Long Province to the southwest of Ho Chi Minh City.

The expressway will have a total length of more than 2,000 kilometers, and its estimated completion date is in 2025.